A construction boom in Silicon Valley in recent years has been a primary factor toward a substantial increase in cargo received at the Port of Redwood City, a port official said.
The vast majority of the cargo shipped to the port is sand and aggregate material — used to form cement or mortar, and essential to modern construction — transported from British Columbia, Canada. The port has seen nearly a 45 percent increase in shipments from the same period last year, said Michael Giari, the port’s executive director.
“The numbers showed that San Francisco, Santa Clara and San Mateo have the largest dollar amount of new construction on the books they’ve ever had,” said Giari, who added that the boom will likely continue through the first six months of this year and possibly beyond.
Construction has been on the rise throughout Silicon Valley, particularly due to growing high-tech companies making more hires, and as a result, needing more space. For example, Apple, Facebook, Google and Samsung all have plans to expand current offices or build on new sites in the region. Such construction activity would likely break the commercial record for the area, which was set in 2000, according to a McGraw-Hill analyst.
The local building boom is also creating a significant impact on jobs, as the region gained about 1,900 jobs overall in the construction industry since the same time last year.
“It looks like this will be a better year than last year,” said Rayna Lehman of the San Mateo County Labor Council.
But analysts caution that the growth may also have political consequences.
“Historically the issue has really been … minorities get screwed by the developments,” said Jason McDaniel, a political science expert.
What can also happen, according to McDaniel, is that cities will try to entice large companies to set up shop locally via incentives such as tax breaks.
“It’s a race to the bottom,” he said.
Despite the sharp increase in shipping activity, the port isn’t expected to run into capacity problems any time soon, Giari said. “Right now, we’re just about back to 2007-08 levels,” Giari said.
Should the regional economy continue to grow, the biggest hurdle for the port — and construction companies — will be if ships aren’t being loaded to capacity, Giari said. This can drive up the cost of building materials because the fixed costs of operating a ship are the same whether it is three-quarters or completely full, Giari explained.
However, the ships can’t be loaded any more than they currently are because the channel leading to the Redwood City port wasn’t properly dredged by the Army Corps of Engineers, Giari claimed. The current channel depth is 24 feet, when it could be as deep as 30 — and that 6 feet translates to thousands of tons of construction materials able to be transported on ships, he said.Bay Area Newsconstruction boomPeninsulaPort of Redwood CitySilicon Valley